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EC 3300 (Principles of Microeconomics) Midterm Exam Q & S 2024 $17.79   Add to cart
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EC 3300 (Principles of Microeconomics) Midterm Exam Q & S 2024
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EC 3300 (Principles of Microeconomics) Midterm Exam Q & S 2024EC 3300 (Principles of Microeconomics) Midterm Exam Q & S 2024EC 3300 (Principles of Microeconomics) Midterm Exam Q & S 2024

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  • October 31, 2024
  • 21
  • 2024/2025
  • Exam (elaborations)
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  • ec 3300 principles of microeconomics midterm exa

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EC 3300




Principles of Microeconomics




MIDTERM EXAM
Q&S




©2024/2025

,1. Question: In the context of consumer theory, the substitution
effect of a price decrease can be best described as:
- A. The change in consumption resulting from a relative price
change while maintaining a constant utility level.
- B. The shift in demand due to a change in consumer income.
- C. The reduction in quantity demanded due to a price increase.
- D. Consumer preference changes over time.


Answer: A. The change in consumption resulting from a
relative price change while maintaining a constant utility level.


Rationale: This definition captures the essence of the
substitution effect, which holds utility constant and only varies
prices.


2. Question: Assume a monopolistically competitive market. In
the long run, firms in this market:
- A. Earn positive economic profits.
- B. Exit the market.
- C. Earn zero economic profits.
- D. Earn negative economic profits.

©2024/2025

, Answer: C. Earn zero economic profits.


Rationale: In the long run, monopolistically competitive firms
earn zero economic profits due to the entry of new firms reducing
demand for each individual firm.


3. Question: In game theory, a Nash Equilibrium is achieved
when:
- A. All players are cooperating to increase each other's payoffs.
- B. All players have played their dominant strategies.
- C. Each player's strategy is optimal given the strategies of other
players.
- D. The outcome is Pareto efficient.


Answer: C. Each player's strategy is optimal given the
strategies of other players.


Rationale: Nash Equilibrium describes a situation where no
player can benefit by changing strategies while the other players
keep theirs unchanged.


### Fill-in-the-Blank Questions


©2024/2025

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